Always focus on other incentives besides pay. This is why companies must base their salary adjustments on market conditions and not merely on a fixed rate of inflation each year, as many large companies do. If a company and manager are closely tracking the market, it will be rare for employees to receive offers that are much higher than what they are making. In this case, the manager likely allowed the employee's compensation to deviate too far from fair market value. For most people, it takes more than a 20 percent bump for them to consider leaving over salary alone. Leaving a job is a big decision, and most employees won't quit over a five to 10 percent pay increase if everything else is good. Related: Great Employees Don't Work Just for Pay. Any time a manager tells me that a top employee left over salary, I am always suspicious. Top performers cite lack of leadership and poor management much more often than salary and benefits. Many managers claim that their employees quit over salary issues, but survey after survey has shown that compensation is not one of the top reasons that people change jobs. In addition, leaders can better determine why employees leave. When entrepreneurs take salary off the table by paying people fair market value, employees can focus on what really rewards them: performing at their peak, improving their skills, and making a difference. With this in mind, here is what I have found that works in my organizations. Related: What Dan Price Should Have Done Before Increasing Everybody's Salary to $70K This was the case with the employees who left Gravity Payments. The real problem arises when employees think decisions on pay are made arbitrarily, or that management is showing unjustified favoritism. However, employees can be demotivated if they perceive pay - theirs or others' - to be unfair. Fundamentally, as Daniel Pink outlined in his TED talk, people are motivated more by intrinsic rewards than extrinsic ones such as pay. Pay in particular is often one of the most contentious areas for employees. All of this begs the question: How should leaders handle pay in their organizations? Since then, he's lost employees and customers over the decision and is having some personal financial difficulties. Gravity Payments CEO Dan Price was lauded back in April for raising the minimum salary in his company to $70,000.